New European rules will crack down on money laundering, terrorist financing and tax evasion

The European Parliament voted today to adopt the Anti-Money Laundering Directive, which will strengthen the EU’s defenses against money laundering and terrorist financing.

One of the most crucial aspects of the new legislation is that it will introduce, for the first time, central registers of beneficial ownership of companies and trusts to be held by all EU countries. Not only will this help in the fight against money laundering, but these registers will prove to be a vital tool in the ongoing fight against tax evasion and aggressive tax avoidance.

They will also help to level the playing field between small businesses, who simply cannot hide behind complicated structures, and their larger competitors.

The registers must be made available to national regulators and investigators, and to people who can demonstrate a “legitimate interest” in looking at them – but the legislation also allows for governments to go further and make the registers completely public, should they wish.

The UK has already made clear its register of beneficial ownership will be made public.

Anneliese Dodds MEP, member of the European Parliament economic and monetary affairs committee, and Labour’s spokesperson on the Anti-Money Laundering Directive, said:

“Today’s vote is a huge step forward for Europe, not just for fighting against the twin threats of money laundering and terrorist financing, but also in the ongoing fight for tax justice.

“New registers of beneficial ownership will allow the authorities to get to the bottom of labyrinthine corporate structures, and see who really owns European companies and trusts.

“I believe we should go further still, and make these registers completely public – European citizens have a right to know who owns the companies that operate in their countries. So I call on all EU national governments to take advantage of the option given in the Directive to make their registers publicly accessible.

“When it comes to money laundering, terrorist financing and tax evasion, the more transparency the better.”

Ms Dodds is currently co-writing the European Parliament’s legislative proposals in light of last year’s ‘Lux Leaks’ scandal, which will be looking to clamp down further on the illegal practices of tax fraud and tax evasion, and on the immoral practice of aggressive tax avoidance.

Neena Gill MEP, member of the European Parliament economic and monetary affairs committee, said:

“Labour voted in favour of the Anti-Money Laundering Regulation because we believe it is essential we have the most rigorous possible protections in place to stop people from either laundering money or financing terrorism.

“Increasing transparency through a central register is a critical measure to shed a light on financial fluxes and interests. However, we all know that for some national governments tackling tax abuses is not the highest priority. As the recent tax scandals show, we remain heavily dependent on the actions of whistle-blowers working in the business.

“Therefore, to convince whistle-blowers to reveal cases of tax avoidance and fraud, we urgently need a European framework to protect them.”

Claude Moraes MEP, chair of the European Parliament civil liberties, justice and home affairs committee, added:

“This vote on the fourth anti-money laundering directive marks a positive step in the fight against tax crimes (for example, as regards beneficial owners registers) and the financing of terrorism and serious crime. It aligns EU legislation with international standards in that field, guaranteeing at the same time EU fundamental rights standards.

“In that regard the civil liberties, justice and home affairs committee also fought hard to ensure the directive was amended to protect personal data. The same applies for the regulation on transfer of funds. These are significant pieces of legislation which will contribute to strengthening security for citizens.”